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A Saint With Sharp Elbows

Warren at a campaign event in Lowell, Massachusetts, earlier this month.

(Photo: Pari Dukovic)

Warren’s Okie upbringing is the kind of backstory that any candidate would try to exploit, but it’s actually her academic career that may prove to be more politically potent. Far from being an isolated denizen of the ivory tower, Warren has long approached her scholarship with a crusading quality. Time and again, she’s been able to distill very complex economic data into simple stories—and not just stories about good and bad luck but almost biblical tales of malfeasance, with villains and victims. “Academics are always very happy to say other people are wrong,” says Jacob Hacker, a Yale political scientist who’s collaborated with Warren. “But Elizabeth would say they’re not just wrong, they’re bad people.”

In 1981, as a young professor at the University of Texas law school, Warren helped conduct an empirical study of people who file for bankruptcy. “I set out to prove they were all a bunch of cheaters,” she once recalled. Crisscrossing the country, often with a portable photocopier strapped into the airplane seat next to her, Warren visited countless ­courthouses, where she pored over records and interviewed judges, lawyers, and often the debtors themselves. What she found contradicted her assumptions: Most bankruptcy petitioners weren’t deadbeats at all but rather middle-class families that had hit a rough patch. Over the next decade, Warren built on this work, marshaling a series of studies to paint a picture of an increasingly vulnerable middle class.

Warren became the senior adviser to the National Bankruptcy Review Commission in 1995, the same year she arrived at Harvard. Congress, at the behest of the financial industry, was debating whether to tighten bankruptcy rules so that it would be harder for individuals to file, and it fell to Warren to explain how much of a burden this would place on struggling families. “It was hard to be in the politics of it,” she recalls. “I remember people saying, ‘You look like you’ve lost weight.’ It was new ways of throwing elbows and exercising influence.”

Warren was a frontline combatant in what she calls “the bankruptcy wars” for ten years, until finally, in 2005, her side lost: Congress passed the legislation (which would later become a precipitating factor in the subprime debacle). But the experience taught Warren a lot about how Washington operates. “Bankruptcy is a complicated law to explain, and most people don’t see themselves as potentially future bankrupts,” she says. “It was easier for [the financial industry] to keep the fight on a bumper-sticker level.” She made sure that the next time she entered a public­ fight, she’d have tightened her message.

“I woke up at three o’clock in the morning and realized the answer I gave you was terrible.”

That opportunity came soon enough. Throughout the Bush-era housing boom, she saw warning signs of coming financial ruin. “I was a crazy person by the early 2000s,” Warren recalls. “I’m saying, ‘This can’t last, we are building so much risk into the system, family by family by family, it will explode.’ ” In 2007, she proposed the creation of a “financial-protection safety commission.” “It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house,” she wrote in the journal Democracy. “But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street—and the mortgage won’t even carry a disclosure of that fact to the homeowner.” It was an irresistibly intuitive framing device, and one that Warren has, over the last four years, been able to leverage to such an astonishing degree that it’s difficult to think of anyone in Washington who’s enjoyed so much influence while wielding so little actual power.

Warren’s proposal was ultimately part of the Dodd-Frank legislation, which established the Consumer Financial Protection Bureau. She spent the next year overseeing its creation. Warren was certain that the simpler and more transparent she could make the bureau the more public support she could build for it. She promised to use “crowd-­sourcing” technology so that consumers could tip off the CFPB about deceptive financial practices, and she posted her daily schedule—complete with coffee breaks—on the bureau’s website. By this summer, Warren had figured out how to make even plumbing a communication tool. She successfully lobbied to locate the newly created CFPB in a building right around the corner from the White House, for maximum public visibility, and she was particularly obsessed with adding restrooms and water fountains in the lobby. “Every Boy Scout troop [leader] in America will know that’s the place you can take the boys after they’ve had their pictures taken in front of the White House,” she explains.

Of course, there’s another Democrat who came to prominence at roughly the same time as Warren and who also rose to power using his phenomenal gift for story­telling. Warren first met Obama in 2003 at a fund-raiser one of her Harvard Law colleagues was hosting for the then-­unknown Illinois state senator, who proceeded to dazzle Warren with his knowledge of her own work. “You had me at ‘predatory lending,’ ” she remembers saying to him. But in retrospect it’s telling that, four years later, it was John Edwards who was the first Democratic presidential candidate to embrace her CFPB proposal and make it part of his platform.

Obama, as president, ultimately pushed for the creation of the CFPB—and tasked Warren with getting it up and running—but Warren was a bad fit for the administration from the start. She frequently found herself at odds with Geithner and Larry Summers, telling Charlie Rose in 2010 that “they see the world from a top-down perspective.” Meanwhile, Warren was also out of step with behavioral-­economics disciples like Cass Sunstein, who believe that government works best when it “nudges” people’s decisions rather than mandates them. Warren favors far more traditional command-and-control regulatory approaches. “Elizabeth is fine with a nudge,” says Adam Levitin, a Georgetown law professor and Warren protégé, “but she also knows that sometimes you need a sharp elbow, and she’s not afraid of that.”